Louis Glunz Beer, Inc., a beer wholesaler in Chicago, sold the distribution rights for the country’s 12th-largest craft brewer, Dogfish Head, and New Holland Brewing, a regional craft brewery based in Holland, Mich., to the Chicagoland MillerCoors Distributor Cluster for an undisclosed amount last week.
The agreement comes after nearly six months of negotiations and multiple attempts by Dogfish Head to terminate its distribution contract with Louis Glunz Beer in exchange for “reasonable compensation.” According to the Illinois Beer Industry Fair Dealing Act, when a brewer wishes to change wholesalers, it must have “good cause” and must also pay the wholesaler fair market value.
The Chicagoland “Cluster” consists of nine independent distributors, including Burke Beverage, Chicago Beverage Systems, Euclid Beverage, Hayes Beer Distributing Company, Chas. Herdrich and Son, Kloss Distributing, Kozol Bros, Joseph Mullarkey Distributing and Town and Country Distributors.
Molly Reilly, a spokeswoman for the Reyes Beverage Group (which owns Chicago Beverage Systems), provided the following statement to Brewbound.com:
“Louis Glunz Beer, Inc. and the distributors of the Chicagoland MillerCoors Distributor Cluster have closed on the sale of the distribution rights related to the Dogfish Head and New Holland Brands. The sales resulted in the dismissal of Glunz claims, and Dogfish Heads counterclaims, and a purchase price was agreed to by the parties which is at the higher end of the range of fair market value for craft beer distribution rights in the State of Illinois.”
Coverage of the court case by beer blog guysdrinkingbeer.com — verified by someone close to the case — indicated that gross profits on the sale of Dogfish Head brands in Illinois exceeded $900,000 between June 2011 and May 2012. In November of 2012, the brewer offered Louis Glunz Beer 4.8 times gross profit on the sale of Dogfish Head brands but the wholesaler believed the brands to be worth 10 times gross profits. The final settlement amount has not been disclosed.